China insurer says Wen Jiabao family fortune did not come from firm

Hong Kong: A Chinese insurance company on Monday disputed a news report that detailed how Premier Wen Jiabao's family made a fortune from investing in the company after it lobbied Wen and others to waive rules requiring its break up.

Ping An Insurance Group said that recent media coverage related to the company had "serious inaccuracies, facts being distorted and taken out of context, as well as flawed logic."

Chinese Premier Wen Jiabao. Reuters.

The insurer did not name a specific news outlet and nor did it say what the errors were. But the public relations company that issued Ping An's statement said it was related to a lengthy New York Times investigation published on Sunday of how Wen's relatives, using obscure partnerships to conceal their identities, profited by investing in the insurer after it avoided a breakup.

The newspaper reported that Ping An's chairman appealed in a letter in 1999 to Wen, who was then vice-premier, imploring him not to allow the financially troubled company to be broken up, as Chinese rules required. The vice-premier's office was among regulators that had authority to sign off on the waiver, the paper said, citing internal company documents, government filings and interviews with bankers and former executives.

Ping An, based in the southern Chinese city of Shenzhen, was kept in one piece and later went public on the Hong Kong and Shanghai stock exchanges. It is now China's second biggest insurance company, worth $60 billion. Its top shareholders include European bank HSBC, a Shenzhen state-owned enterprise and other Chinese companies, mostly non-state-owned.

Relatives of Wen, using the partnerships rather than holding the investments directly in their names, built up stakes in the insurer that at one point were worth $2.2 billion, the New York Times reported.

Ping An said it was a "law-abiding" company that complied with rules and regulations and made "factual, comprehensive disclosures and reports on its shareholders and operations." The company vowed to take "appropriate legal action."